Basic rules for filling in and controlling completeness of submission of Report on controlled operations

Press service of the State Tax Service of Ukraine, published 19 September 2022 at 12:06 Chapter: New about taxes (news)

State Tax Service of Ukraine reminds that in accordance with requirements of Article 39 of the Tax Code of Ukraine (hereinafter - Code), taxpayers who in 2021 carried out controlled operations must submit Report on controlled operations (hereinafter - Report) to the State Tax Service.

Report is submitted by October 1, 2022, so the last day of submission for the 2021 reporting year is 30.09.2022.

Report must be submitted with Notification on participation in an international group of companies (hereinafter - Notification).

Form and procedure for compiling Report was approved by Order of the Ministry of Finance № 8 as of 18.01.2016 "On approval of the Form and Procedure for compiling Report on controlled operations ".

Report is submitted to the State Tax Service by the electronic communication means in the electronic form in compliance with requirements of the Laws of Ukraine "On electronic documents and electronic document management" and "On electronic trust services".

Report consists of the title, main parts, annex (es) and information to annex (es), which are an integral part of Report.

Main taxpayer’s data who submits Report are indicated in the title and general information about operations with non-residents – parties of controlled operations is provided in the main part.

Herewith, the number of annexes to Report must correspond to the number of counterparties specified in the main part of Report. Amounts of controlled operations in terms of specific counterparties must also match.

Information on the connection of persons to annex is filled in if there is a joint venture with related persons, including through companies specified in Sub-section 39.2.1.5 of the Code.

Requirements of Paragraph 39.4 Article 39 of the Code stipulate that Report and Notification are forms of reporting for tax control over transfer pricing.

Liability of taxpayers for failure to submit (late submission) of Report, Notification, failure to include in the provided Report all controlled operations or provision of inaccurate information in Notification is provided for in Article 120 of the Code.

For failure to submit Report and Notification, a fine in the amount of 300 subsistence minimums for an able-bodied person, established by the Law on January 1 of the tax (reporting) year, which amounts to 681 000 UAH for the reporting year 2021 (300 x 2 270 UAH) is envisaged (Paragraph 120.3 Article 120 of the Code).

For the untimely submission of Report and Notification (Paragraph 120.6 Article 120 of the Code), a fine is envisaged - 1 amount of the subsistence minimum, established by the Law on January 1 of the tax (reporting) year, for each overdue day (but not more than 300 subsistence minimums).

However, the marital law in the country made its adjustments. Norms of the Code (Paragraph 69 of Sub-section 10 Section XX of "Transitional Provisions" of the Code) determine that in case of the taxpayers’ impossibility to fulfil their obligations to comply with deadlines for paying taxes and levies, submitting reporting, such taxpayers submit a corresponding application together with supporting documents in accordance with requirements of Order of the Ministry of Finance of Ukraine № 225 as of 29.07.2022 "On approval of Procedure for confirming the taxpayer's possibility or impossibility to fulfil obligations specified in Sub-paragraph 69.1 Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the Tax Code of Ukraine and the list of documents for confirmation»¹ (hereinafter - Order № 225), which entered into force on 06.09.2022.

Currently, the taxpayers have a right to submit such application with relevant documents not later than 30.09.2022, which on the date of entry into force of Order № 225 have opportunity to submit application and documents (copies of documents) to the controlling body, information about the inability to fulfill tax obligations.

For taxpayers who have not submitted Reports or who are checking Reports that have already been submitted, are advised to review presentation materials on the algorithm for filling in the Report.

In case of self-identified errors in the already submitted Report, in particular, submission of information not in full amount, presence of errors or deficiencies, such taxpayer has a right to submit Report marked as "reportable new" before the deadline for its submission, i.e. until 30.09.2022. New Report is submitted for the same reporting period and must contain complete information about controlled operations, as provided for compiling the main Report (taking into account corrected errors).

At the same time, the controlling body, carrying out monitoring and organizing control measures, takes into account Report marked as "reportable new" and fines for violations independently discovered and corrected by taxpayers are not applicable in this case.

¹Order of the Ministry of Finance of Ukraine № 225 as of 29.07.2022